Analyst Upgrade Turns on the Lights for LED Makers

LED lighting stocks have waxed and waned over the years but the stocks are getting a boost today following a jump in guidance from one maker and a stock upgrade and price target increase for another. Could this be the beginning of something big?

Revolution Lighting Technologies Inc. (RVLT) issued a business update on Tuesday morning that has sent the stock up by 40%. The company now says that it expects pro forma revenues of $35 million for the year, double the firm’s 2012 pro forma revenues. Gross margins are now forecast to reach 35% or higher for the next 3 years and EBITDA margins are forecast to rise 15% or more in the same period.

Cree Inc. (CREE) stock was upgraded to Buy this morning by analysts at Canaccord Genuity and the firm put a new price target of $80 on the shares, up from a previous target of $65. Cree last week introduced a new generation of LED light that it said is 78% smaller than a previous design yet packs the same performance punch.

SemiLEDS Corp. (LEDS) said last week that it had received a delisting notice from Nasdaq for failing to maintain a share price of at least $1 a share. The company also faces several class action lawsuits as earnings have tanked after a dramatic run-up in April. Shares are up nearly 15% today, though.

The introduction of an energy conservation bill in the U.S. Senate in April gave SemiLEDS and Revolution shares a nice shot in the arm, but lack of action on the bill has cooled enthusiasm for the stocks. But as LED lighting comes down in price, hopes are rekindled that the stocks will go on another tear. Highly speculative, to say the least.

Shares of Revolution Lighting are up more than 37% shortly after noon on Tuesday at $3.52 in a 52-week range of $0.46 to $5.50. Nearly 5 million shares have traded so far today against a daily average of about 1 million.

Shares of Cree are up 11.7% at $67.25 in a 52-week range of $24.50 to $76.00. More than 5 million shares have traded today versus a daily average of about 2.2 million.

SemiLEDS shares are up nearly 13% at $1.22 in a 52-week range of $0.60 to $2.44. Share volume is nearly 3x the average of around 280,000.